During June 2020, the following transactions occurred in Michael Ltd.
- Revenue earned on credit, $869,250.
- Sales returns, $18,050
- Cash collected from Accounts receivable, $875,000.
Accounts Receivable has a debit balance of $637,167 and Allowance for Doubtful Debts has a credit balance of $9,075 at 1 June 2020. Ignore GST.
Based on percentage of net credit sales method and past experience, the firm’s bad debts expense for June has been estimated at 1% of its net credit sales. Ignore GST.
Required:
- Prepare general journal entries to record the transactions in June.
- Determine the bad debt expense for June and prepare necessary adjusting entries to adjust the bad debts expense.
- Prepare the relevant parts of the balance sheet that show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet.
- On 18 July, the management of the firm has decided to write off the bad debts of $1,760 owed by one of its customers, John Ltd. Prepare journal entries.
Click on Buy Solution and make payment. All prices shown above are in USD. Payment supported in all currencies. Price shown above includes the solution of all questions mentioned on this page. Please note that our prices are fixed (do not bargain).
After making payment, solution is available instantly.Solution is available either in Word or Excel format unless otherwise specified.
If your question is slightly different from the above question, please contact us at info@myassignmentguru.com with your version of question.